Although Apple scoffed at the financial impact of the settlement, licensing fees of Nokia technologies in the iPhone will end up costing Apple billions.
The Cupertino, Calif. company could pay Nokia a lump sum of up to $608 million with about $138 million in licensing fees going to the Finnish firm every three months, according to Deutsche Bank analyst Kai Korschelt. The analyst bases those figures on the assumption Apple’s pays the going royalty rate of 1 percent on all iPhones sold through the first quarter – 110 million handsets with an average price tag of $550. Per quarter, ongoing licensing fees could be $138 million (95 million euros), the Deutsche Bank expert says.
Tuesday, Apple announced it was settling with Nokia, telling investors it was happy to get the long-running lawsuit behind it. Analyst reaction appeared to favor Apple, with UBS’ Maynard Um telling clients the settlement could save the tech giant money otherwise spent for legal fees.
The lawsuit, which began in 2009, provided wins and losses for both sides. In March, the U.S. International Trade Commission partially ruled in Apple’s favor, ruling the iPhone maker did not infringe as many patents as Nokia contended. That partial victory may have enabled Apple to gain better settlement terms. However, the die was cast when ITC staff in April told the Commission it felt Nokia did not infringe Apple’s patents.
Nokia may have won a Pyrrhic victory Tuesday after Apple Monday overtook the cell phone veteran for first place in smartphone sales. Lucky thing Apple’s got deep pockets.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
17 responses to “Apple Will Pay Nokia Billions In iPhone Patent Licensing”
Why is it almost every story fails to mention this all came about with Nokia trying to extort Apple for licensing fees by asking over three times the amount every other licensee was paying? Apple was willing to pay from the get go, but NOT be raked over the coals, bent over like a prison punk! By taking it court they would have only paid the fair amount, a HUGE win for Apple
Andoid phone makers are quite likely to get sued by Nokia, too and each of them has probably less bargaining power than Apple. So it might be even more expensive for them. Anyway, I doubt that paying the license fees puts Apple much at a disadvantage, if at all.
Not true, since almost all android manufacturer (if not all) are already paying those fees.
Motorola, LG, Samsung, Sony and others? They all have been making phones before the iPhone, and still make “dumbphones”. And most if not all are already paying Nokia for those fees.
* License fees
So are licensing fees the only thing keeping Nokia going these days? (I’m being partially facetious)
Amazing isn’t it? I noticed the same thing. Are these journalists who actually do a little research or just hacks regurgitating news heard elsewhere? I’m going with #2.
Not knowing the details of the settlement, I’m pretty sure Apple came out ahead. It seems that everyone who believes this to be a win for Nokia do not seem to understand the fact that Apple has been prepared to pay for the licenses (and has always wanted too). The lump sum and the quarterly fees or normal licensing fees. Apple forced this into court, because they felt they were being treated unfairly by Nokia.
I’m also sure the settlement here had something to do with Apple’s purchase of 200 Freescale (Motorola) patents, many of which are related to wireless communications.
shame on you , CoM. this article is horsesh*t. why do you re-print this crap? this guy is pulling numbers out of his butt. these “analysts” are a joke.Apple will be paying the same licensing fee for these Nokia patents everyone else does. whatever that is. including the total due for the several past years because Nokia refused to do that. that was all Apple ever asked to do, not to pay none at all.a real analyst would research the actual amount of that Nokia fee, which is paid by all OEM’s and so can be found out. not make a stupid guess of “x%”. of course all OEM’s – including Apple – pay a variety of license fees to various parties for smartphone technology. a real analyst would know that too and list the main ones. those fees are part of production costs, not just the parts list price that iSuppli reports and then stupid blog “pundits” report as the OEM’s whole production cost.And Nokia did not get the patent cross-licensing it asked uniquely of Apple. Elop settled the case started by Nokia’s old regime on Apple’s terms because Nokia really needs cash now – another piece of real news this bozo missed.you get better genuine analyses these days from sports reporters than from technology pundits and bank analysts.Edit
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Hacks is the correct answer.
sports reporters/analysts are prettttty bad